Priced To Sell

For Sellers

OK. You want to sell your Miami home. You want to get the most money for it. You have some flexibility with your time and don’t mind waiting a few months for the right buyer to come along. As a matter of fact, you’re convinced that’s all it will take. Time.

Time can be your worst enemy when selling a house.

You call a real estate agent. She tells you your home is worth about $310,000 but you really, really want to get more money so you insist on listing it for $335,000. After all, your home is in impeccable condition and who wouldn’t see that? Nothing needs to be done to your house. Anyone buying it can just move in and start enjoying the gorgeous pool area.

The real estate agent does not think it is a good idea to list the home at $25,000 above what she thinks it’s worth. She knows that the most interest on a new listing is generated when it shows up on the MLS for the first time. The first 30 days are crucial. But you somehow manage to convince her to “just give it a try.” You really do believe your home is worth $335,000. Well, at the very least, you know you want to sell it for that much.

The home gets listed on the MLS at $335,000. It is now the most expensive house listed in your neighborhood. Similar homes are listed at $305,000. Similar homes without a pool are listed at $295,000. Yours is listed at the highest price and you’re proud of it.

Two days later a real estate agent with a buyer calls your REALTOR® and schedules a showing. That same day they tour the home. They agree with you on the condition of the house. It’s impeccable.

That evening an offer gets faxed over to your agent.

She calls to tell you they placed an offer of $305,000 and want to close in 30 days. The agent tells you this is a fabulous offer.

You’re insulted.

You’re so insulted you don’t even want to counter-offer. You forget that your agent told you she thought the house was worth $310,000. You’re convinced it’s worth more. You just need to wait a bit for the right buyer to come along. It’s only been on the market for 2 days, after all. Let’s wait and see who else is out there looking at homes.

During the next 30 days, the home gets shown 6 more times. No one else makes an offer on it. Another month passes and it gets shown 3 more times. Another offer comes in at $280,000. Well! That is not exactly what you had been waiting for so you ask the agent to tell them, thanks but no thanks.

But now you’re wondering if maybe your agent was right about the $335,000 being too high. Begrudgingly you agree to drop the price. Where do you drop it to? $320,000. Still higher than the amount the agent had said it was worth and guess what? Two months have passed since that value was calculated and home prices have dropped. So now your home is worth about $305,000. Not only was your reduction not great enough, the drop in home values is making it harder to close the gap between what your home is worth and what it is listed at.

This method of dropping your listing price is called chasing the market. You are chasing it, but you are never going to catch it. You will always be above what the home is worth and you will be wasting valuable time as you wait for the right buyer to show up.

The scenario in this article is not fictitious. It really happened. In the course of a year, this home seller dropped the price bit by bit until it finally reached $300,000. But in that same year, the values of homes had dropped as well and the home was now worth $290,000. This home seller commented on more than one occassion to the real estate agent that she wished she had listened. She wished she had accepted the first offer. Mind you, the real estate agent was confident that the first offer could have been brought up to $310,000 with a counter offer.

The home is now rented to a tenant as the sellers had been under contract for a new home elsewhere and could not afford two mortgages. While this isn’t what the sellers wanted in the beginning, it is a solution to their problem. But now they’ve added the responsibility of long-distance property management to their repertoire.

Don’t chase the market. It’s faster than you are.

Find a competent real estate professional and listen to what they have to tell you. Sit down. Crunch your numbers. Think it through. Mull it over and then price your home where it should be or don’t put it up for sale at all if you don’t really have to.

Spoken by Maggie Dokic | Discussion: Comments Off on Chasing Down The Market Never Works